How are health costs impacting retirees?

Tuesday

Nov 12, 2013 at 12:01 AMNov 12, 2013 at 4:10 PM

Thousands of Cleveland County residents expect their health insurance plans and costs to change under President Obama’s Affordable Care Act. Now, some of the county’s retirees have learned they are losing their medical insurance plans altogether.

Matthew Tessnear

Thousands of Cleveland County residents expect their health insurance plans and costs to change under President Obama’s Affordable Care Act.

Now, some of the county’s retirees have learned they are losing their medical insurance plans altogether.

Celanese, which has operated Ticona Polymers in Earl, notified the company’s retirees and surviving spouses in a recent letter that their retiree medical plans will end effective Dec. 31, 2014.

“We are experiencing substantial and continuing increases in our retirement plan costs,” Celanese conveyed in the letter to retiree beneficiaries. “These liabilities are underfunded and growing. This made it necessary for us to make this difficult decision.”

Forced to find other options

Gene Meade, of Casar, said the company’s decision will make paying for insurance more difficult. Meade worked with the company for 34 years at the Cleveland County plant.

“The cancellation of the retirees’ medical insurance will make the retirees pay more for insurance,” Meade said in an email to The Star. “We had a good plan and was hoping on keeping it for the duration. I guess we will have to get Obamacare now, if we can get signed on. We’re very disappointed with the cancellation, but we can’t fight Celanese.”

In recent years, Celanese reduced its workforce at its Earl plant.

In 2009, the company shut down its polymer production unit, which specialized in the production of plastic for automobiles, cutting about 100 jobs to consolidate with a Kentucky facility. It kept a separate unit in operation with about 50 employees.

Celanese employs more than 7,000 people at plants worldwide.

“With the retiree medical plan ending, you will need to choose another option for healthcare coverage for 2015, or sooner if you desire,” according to the letter from the company to retirees. “Celanese will be making you a cash payment offer that you can use to help you pay for new healthcare coverage if you waive Celanese coverage.”

Cutting retiree plans a growing trend

Celanese isn’t the only company ending medical insurance plans for its retirees.

The move has been a trend for companies in recent months. In September, IBM announced plans to move retired workers off its health plan, due to rising costs of providing the services, and give them money to buy other coverage. The company reported that projections showed costs for Medicare-eligible retirees will triple by 2020.

Other large employers are also moving away from retiree health benefits. American Airlines parent AMR Corp., for example, has also sought approval in recent months to dispose of its retiree medical insurance program.

The Associated Press contributed to this report. Reach Matthew Tessnear at 704-669-3331, at mtessnear@shelbystar.com or on Twitter @MatthewTessnear.